Bank A pays 6% simple interest annually. Bank B pays 5.9% interest, with annual compounding. Bank C

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Bank A pays 6% simple interest annually. Bank B pays 5.9% interest, with annual compounding. Bank C pays 5.8% interest, with monthly compounding.

a. How long will it take for your money to double in each of the three banks? Please state your answers in years, rounded to the nearest tenth of a year (e.g., 6.3 years).

b. In one or two sentences, what does your answer to part A illustrate about compound interest?

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Principles of Finance

ISBN: 978-1285429649

6th edition

Authors: Scott Besley, Eugene F. Brigham

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Question Posted: Aug 05, 2013 03:15 AM

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Bank A pays 6% simple interest annually. Bank B pays 5.9% interest, with annual compounding. Bank C

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Let X is the present value and double is 2X A Bank A X 1 I n 2X X 106 n 2X 106 n 2 Ta...View the full answer

Principles of Finance

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